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ERP usage gap reveals Aussie enterprises’ missed opportunities

Australian organisations are not using enterprise resource planning (ERP) to its full potential, according to new research which reveals that 66% of CIOs believe their organisations are using less than half of the features of ERP systems.

Even though more than 90% of organisations have an ERP system, software solutions vendor Epicor, which commissioned research by Telsyte, says the ERP high usage gap indicates missed opportunities and a need for ERP mobility, integration and modernisation.

“Telsyte’s investigation into the challenges Australian organisations have with their existing ERP systems has revealed an unfortunate ERP usage gap,” said Craig Charlton, senior vice president, Asia Pacific for Epicor.

“Simply put, because of factors hampering ERP feature use — including a need for more modern ERP functionality and the relative absence of integrated FSM technology — Australian businesses are experiencing fewer business benefits and less significant productivity gains than they should.”
The Telsyte research also reveals that more than 80% of Australian businesses have staff working remotely or on the go, yet less than half support ERP mobility — a significant shortfall.

According to Telsyte, nearly two-thirds of Australian businesses with more than 20 employees have some product or services distribution as part of their operations – in fact, the rate of organisations distributing both products and services has increased nearly 10% year-over-year.

“However, more than 70% of Australian businesses do not perform automated Field Services Management (FSM) operations at all and some 40% of organisations using dedicated FSM applications do not have integration with their ERP systems,” Telsyte observes, also noting that the latter can result in “time-consuming and error-prone batch process to integrate the data collected with back office systems”. It also observes that, overall, 37% of organisations have distribution processes, but no FSM.

Telsyte senior analyst Rodney Gedda says CIOs who participated in the firm’s Australian Enterprise Software Market Study 2015 identified a range of factors that can prevent ERP from being used to its full potential, including inflexible features that are not easy to modify, a high level of complexity, poor integration with other applications, poor user interfaces and overall misalignment with business processes.

Conversely, CIOs rated easy to use interfaces (35%), flexibility (34%), in-house skills (34%), vendor support (31%) and change management (25%) as the top five factors important to a successful ERP deployment.

“Interestingly, system integration skills and lessons from previous projects are not rated highly by CIOs,” Gedda says.

“This indicates ERP modernisation programs require new ways of thinking and skill sets to boost business outcomes. Factors like how staff use popular public cloud applications, the level of workforce mobility, the suitability of a third-party service provider, and how the organisation deals with change are critical to achieving a better result with ERP.”

“By examining known challenges with ERP and aligning projects with reported success factors organisations can increase the value that ERP investments deliver to the business.”

So, as Gedda concludes: “It’s All about Cloud – or is it?”

As Gedda explains, while a growing number of Australian organisations subscribe to a cloud-based ERP service —currently, 48% — most (75%) organisations manage an on-premises ERP application and only 16% are cloud-only, while a strong two-thirds of CIOs managing on-premises ERP systems have no plans to move them to the cloud and only 14% are going cloud in the immediate term.

“Telsyte predicts a gradual shift to cloud-based ERP as organisations continue to value the control and existing investments in on-premises solutions,” Gedda concludes.